The reason Google hasn't built a walled garden around the internet because they simply don't yet have the power to do that.
You talk as if it was something they could easily have done but have chosen not to. I disagree. They just aren't in a position to do it.
It makes no sense at all to say that innovation on the web has vanished because of the Appstore. We are in in a boom time for internet startups, and we have healthy browser competition leading to web standards advancing much faster than at any time in the past.
There is room for both the open web, and for more controlled environments like the app store or Facebook to coexist and compete with one another. Each offers different tradeoffs.
The existence of different kinds of environment is a good thing. It provides a variety of different economic opportunities, and choices for consumers.
Google would naturally like to have more influence and control, but the reality is that they exist in a competitive environment.
Google could do this—there are multiple options to silently wallgarden the user. Just check how much traffic Google moves. If they want they could arbitrarily redirect traffic and subtly punish user's not using their tools.
But that's not their culture. Just look at their products, how far they pushing the boundaries and still stay open, give back and contribute to the community. Look at V8, Dart, Go—all open, all free, all top-notch, all following the Internet's principles and look at Apple, FB—I see no groundbreaking innovation that's free or not protecting their walled garden. Even if Google has some hidden agenda with their products (like with Chrome) the products are always best-of-breed and never deadlock the user.
The point is: Google benefits of an open Internet, their business model is fully based on an open Internet. Therefore they will do everything to keep the Internet neutral, free and decentralized. In contrast, the bizmodels of Apple and FB do not rely on these values, they need walled gardens. Enough reasons to trust them less.
RE-EDIT: Took out later added passages as wished.
Please don't rewrite your original comment after I've responded, not cool.
Thrift[1] and Cassandra[2] as well, FWIW.
As I said, they don't have the power to close the internet that you attribute to them. This has nothing to do with their culture, however great you might think it is.
This is the first time I've heard anyone make this claim.
The commenter I was replying to claimed that Google chose not to build a walled garden around the internet because of their good character.
If they were able to do this, they'd be able to limit the threat of Facebook and other advertising based competitors.
They haven't done it simply because they can't. Not because it wouldn't be to their advantage.
Google has more power than many others who have built walled gardens in the past.
Google was not the #1 search engine in China. This is also a fact.
Whether they 'got their ass handed to them' is another story, which could be supported by numbers, though it's somewhat subjective.
http://www.smh.com.au/technology/technology-news/google-bows...
Google's penetration in China was very low (we've had native Chinese speakers living with us for the last three years and they had hardly heard of Google).
Not only is Google's share in China low, it's falling.
http://thenextweb.com/asia/2012/02/23/sizing-up-two-internet...
It is often more difficult to be successful on the internet without devoting significant resources to Google specific SEO. Doing so without the benefit of Google search would be orders of magnitude more difficult, and Google is under no obligation to return any particular website in their results (e.g. Safe Search).
Google is a company just like any other, only, perhaps, more so.
If you build a really great web based product you don't need to do any single SEO activity to get strong traffic. No white or black hat or anything needed. People will come anyway.
It's all about the product. If it's good people will tell and Google will notice. And Google is so smart that every crappy site powered by 100,000 system generated backlinks blasts will stay inferior.
Assuming a really great web based product begs the question a bit. It's a pretty select group.
Ebay and Amazon are more typical of large consumer facing companies.
Facebook does a great deal of SEO - it's how they compete with Linkedin for eyeballs.
You can be successful with your product on the WWW without employing any Google services, being totally independent. If people and other sites like you and link back to you your traffic will quickly skyrocket—which feels natural. You are not obliged to use any Google service like GA. Just use the Internet and its open standards and you are ready to go because Google left the Internet's core like it is and didn't build a walled garden around it. That's the great thing about the web: it's decentralized and everybody can contribute, Google haven't tried to change this. That's why I don't like the native app trend with the appstore, all the innovation the Internet brought us are vanished by one central and strict entity and nobody cares, Android at least tries to emulate some parts of the net (i.e. by using intents, allowing multiple appstores, with the open nature of Android, etc.), Google is regarding their marketplace Play much more relaxed than Apple.
Looking at the Appstore or the Facebook API, there are so many rules which don't follow any of the core principles of the Internet. You have to play by these rules otherwise you are banned or completely and utterly dependent of one single entities. Moreover, if you then play by Apple's or Facebook's rules you still do not get the impact as from Google traffic-wise.
Ultimately, Google haven't entered the Chinese Market which shows the company's values. Every larger western corporation have build joint venture based branches in China—every corporation, except Google—and that's distinguishes Google.